E-Mini S&P

The chat room has been quiet lately, sometimes with as many as 40 to 50 subscribers silently lurking from the sidelines.  Even so, the handful of active traders who are not there merely to watch have been calling profitable turns with enviable aplomb.  Yesterday, for instance, although this vehicle ended the day little changed, there were enough gratuitous ups and downs to provide a small but nourishing feast for anyone with the diligence and patience to harvest the opportunities thereof. In the course of the day, some subscribers played the upside, others the down, with both reporting success. On the accompanying chart, I've labeled what looked  to be the two easiest trades of the day.  While a more lucrative gambit would have been to have gotten short in the first hour, this would not have been the lay-up we all hope for, since it is never easy to go with a trend that has developed sufficiently that everyone is aware of it. This was the case yesterday, since the futures had been ratcheting steadily lower after peaking overnight, hours before the NYSE opening. Referencing the attached chart (see inset), buying at P1, a Hidden Pivot midpoint support, was the easiest trade of the day. Although it is in retrospect that I make this claim, it is a trade that I had actually flagged in the chat room before-the-fact.  It did not work out exactly as we might have hoped, however, since the futures reversed from a single tick above P1, stranding any bids that hewed precisely to my suggestion. The second 'easy' trade came on the small pullback to P2.  That is the midpoint resistance of the uptrending pattern labeled ABC in purple. As is taught in the Hidden Pivot Webinar, this is the best place to buy belatedly if

From a trader's perspective, the E-Mini has served up a growing pile of slop since the day after New Year's, when the futures topped a single tick from a very important Hidden Pivot target that had been posted in the chat room. The pile grew still larger with yesterday's emetic price action, and there is little point in trying to predict when the next exciting move will occur. My targets for the broad averages are quite a bit higher, but we should not dismiss the alternative possibility that the 1846.50 high achieved on the final trading day of the year will stand for at least a few weeks if not longer.

There was no follow-through to yesterday's rally, but bulls nonetheless generated a bullish impulse leg on the hourly chart that is likely to set the tone for today.  As you can see in the chart, the first attempt to extend the bullish A-B to a C-D follow-through failed precisely at the midpoint pivot. My hunch is that buyers will need to create a second point 'C' in order to get rolling. Accordingly, I'll recommend buy-stopping yourself aboard at the second 'x' entry point. This will be best accomplished with a camouflage entry on a chart of lesser degree, since the implied risk of initiating the trade using the big pattern is 3.50 points, or $175 per contract. Our goal when trading this vehicle will always be to cut theoretical risk per contract to more like 3 to 5 ticks, or $37.50 to $62.50.  For your further guidance, I've sketched in the trade hypothetically. Please note that the second point 'c' would alter your entry price and the midpoint resistance.

I all but guaranteed a tradable low at 1812.75 yesterday, but if you waited patiently for three hours for the opportunity to gestate, you can be forgiven for losing interest. Neither bulls nor bears would have enjoyed waiting out the hiccup that occupied the better part of the day.  There was just six points of movement in either direction to exploit, none of it easy money. The target is still valid but will be too long-in-the-tooth by Tuesday morning to be worthy of promoting.  Night owls can still try to leverage this opportunity with an 1812.75 bid, stop 1811.75.  Officially, I'll assume one contract, but you can step up the size if you use camouflage. Let's put a time limit on this one as well: 8:30 a.m. EST. ______ UPDATE (January 7, 9:29 a.m. EST): Time to throw in the towel on the trade, since bears have spent 90 hours unsuccessfully trying to reach a modest target that was signaled last Friday. Bulls have no energy either, judging from the evidence this morning. Sure, the Dow will open up 80-90 points. But that is really pathetic, considering they've had four days to prime and pump the short-squeeze engine. From a trading standpoint, incidentally, the futures are a 'camo' long at the moment.

This vehicle has been moving very precisely in both directions relative to our Hidden Pivot targets -- not that that has made it a breeze to trade. On Friday, a dive in the second half of the session reversed from a single tick above a midpoint support I'd flagged as tradable in the chat room. Then, a second attempt to breach the support in the final hour also failed. When downside progress is labored like this, we should infer that bulls hold the upper hand. This would imply more progress Sunday night, to at least 1835.50, the 'D' target of the minor ABC rally from Friday's bottom. Bulls' further progress this week would become likely if they are able to exceed that number by more than two or three ticks. Alternatively, if the futures head lower without having exceeded 1833.00, expect them to come down to at least the 1812.75 target shown. It can be bottom-fished with a stop-loss as tight as 1.00 point. Note that all of the action on Thursday and Friday occurred below the 1846.75 target that I'd said might stop the rally for perhaps 4-5 days. For all we can guess at this point, it could prove to be the top of the bull market. Odds are against this, given that the bull has been chugging along for nearly five years. In any event, we'll be better able to judge the long-term bull market's health when we've seen how minor rallies and corrective patterns play out over the next few days.  The first sign that something might be wrong is if the 1812.75 support is decisively smashed today or tomorrow.

This vehicle's ups and downs have been so precisely predictable lately that I've been posting tradable pivots in the chat room for your pleasure and potential profit. Yesterday, for instance, with the futures hovering near 1827 after a 21-point drop, I put out the following trade recommendation:   "A downside target at 1821.50 is analogous to the one at 163.44 that I've flagged in DIA. It can be bottom-fished with a 3-tick stop-loss."  Long-time subscribers will know that when I am very confident about a price pattern, I will advise trading its target with a straight bid and a tight stop-loss rather than via camouflage.  In this case, however, the canny buyer would need to have placed a bid a single tick above the target, since the actual bottom occurred at 1821.75. I'd anticipated this as well in the post immediately following the trade recommendation: "I haven't published this target outside of the chat room, but be prepared for front-running nevertheless, since there's always a suspicion that a Goldman mole inhabits this room."  Whether or not it was Goldman's trade desk that got in front of our bid will never be known. But clearly, we'll need to take steps to prevent our getting shut out of trades in which we've nailed a swing high or low within a tick or two.  To that end, before 'going public', I'm going to wait a bit longer, until the vehicle we're trading is closer to the target.  I am also going to add some profit vehicles to the mix that are not as heavily overtraded as the E-Mini S&Ps.  If you're keen on taking advantage of the opportunities thereof, be prepared to pull the trigger when I'm in the chat room.

Tuesday's rally demonstrated how it's possible to be quite confident about where a stock is headed without necessarily being able to capitalize on it.  In the chat room, a hawk-eyed Pivoteer identified an 1846.75 target on the weekly chart. At the time, the futures were in the throes of a five-day stall at an 1840.00 target we'd used earlier.   Targets don't get much prettier than the one at 1846.75 (see inset), and so I noted in the chat room that this 'very compelling' price objective 'begged to be shorted'.  However, I warned that the Hidden Pivot might prove to be un-tradable, since, "If Mr. Market [was] his usual diabolical, sonofabitch self, the futures [would] end the day within 1.00 point of the target." As indeed they did.  In the final hour of the session, the March contract shot up to a high at 1846.50 that lay just a single tick shy of our target. The next 30 minutes produced no further gains, and the futures eventually settled at 1846.25, a half-point from the target. This would have made for a great short if it had occurred around mid-session.  But on the closing bell? No way. [Breaking news: In the chat room this morning, with the Dow down nearly 100 points, the aforementioned hawk-eyed Pivoteer reported having gotten short minutes before Tuesday's close using call spreads in SDS, an ETF proxy for 'ultrashort' S&P 500 positions.] So what now? I expect this vehicle to continue higher in the weeks ahead.  However, if the rally were to launch in the first hour or two of Thursday's session, that would be warning bears either to step aside or to go with the flow, since the Hidden Pivot at 1846.75 is not exactly chopped liver. In fact, the target has been more than

Permabears hoping that the opening days of 2014 will deliver a long overdue reality check to the markets had better study the chart accompanying this tout.  If anything, the year appears likely to begin with a bang rather than a bust. Notice how all of the price action during the last several days has occurred above a Hidden Pivot resistance at 1830.00. The rally target was so clear and compelling that we might have expected a pause of at least 3-5 days before stocks went any higher. Instead, the futures pushed through the resistance effortlessly, suggesting that bulls are consolidating for yet another leg up. One caveat applies, however: The daily chart shows Hidden Pivot rally targets at 1856.75 and 1893.75 that have been more than a year in coming (for those interested, A=1382.25 on 12/28/12; or alternatively, A=1340.25 on 11/26/12; and B=1685.75 on 5/22/13). Either number should be expected to show enough stopping power to be shortable (with a very tight stop-loss), and that's what I am going to suggest.  However, if the lower number gives way easily, bet on more upside to the higher, at least. If it too proves to be a pushover, bears had better run for cover. _______ UPDATE (11:09 p.m. EST): In the chat-room just now, an alert Pivoteer identified a very compelling target on the weekly chart at 1846.75.  The futures are not likely to exceed it, at least not today, since the target is clear, clean and unmistakable. But it will not necessarily make for an ideal short, since, Mr. Market being his diabolical, sonofabitch self, the futures are liable to be hovering within a point of it when 2013's final bell rings. _______ UPDATE (After the bell): Actually, the futures were hovering just a half-point from our target when the bell

The futures topped Friday a point from the rally target we'd been using for a week. As noted in an update after-the-fact, getting short and staying short would have been difficult, although it would have been theoretically possible to come away with a profit of perhaps $200 per contract.  The target was a clear one -- clear enough, I should think, to give the rally a day or two's pause.  However, and as I mentioned here on Friday, none of the abc corrections that played out on the very lesser charts reached their 'd' targets.  Instead, they turned from near their respective midpoint pivots, suggesting there are more buyers waiting in the wings.  Accordingly, night owls should trade with a bullish bias Sunday night, although I am hard-press to offer you a target that inspires bold confidence.  The 5-minute chart can be used, whether if bottom-fishing or looking for a promising camouflage set-up.  As of this moment, I'm looking for a tradable bounce from within a tick of the 1834.25 target shown.